China Restricts Offshore Listing of Online Platforms with Data on More than 1 Million Users

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Chinese authorities have introduced new rules that restrict online platforms from pursuing initial public offerings (IPO’s) on offshore bourses if they have personal data concerning more than 1 million users.

Amendments to the “Internet Security Inspection Measures” (网络安全审查办法) made by the Chinese central government are set to come into effect on 15 February, in order to better satisfy the requirements of China’s new “Data Security Law” (数据安全法).

Under the amendments Internet platform operators who have personal data on more than one million users are required to undergo security inspections by China’s Internet security inspection authorities should they wish to pursue listing overseas.

The changes to the Measures also include the China Securities Regulatory Commission (CSRC) as one of the authorities responsible for conducting safety reviews.

The amendment were signed off by over a dozen of China’s central government authorities, including the People’s Bank of China (PBOC), the Ministry of Commerce (MOFCOM), the Ministry of Finance (MOF) and the National Development and Reform Commission (NDRC).

The “Internet Security Inspection Measures” first came into effect on 1 June 2020, for the purpose of “protecting the security of key information infrastructure and supply chains.”

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